The curated database of hedge funds that publish investor letters. Research by geography, strategy, and schools of thought.
| # | Fund | Strategy | Style | Geography | AUM | Latest Letter |
|---|---|---|---|---|---|---|
Baillie Gifford's International Growth strategy delivered strong absolute returns in Q2 2026 but lagged the ACWI ex US index, with disappointing 12-month relative performance that the manager believes does not reflect portfolio fundamentals. The period was marked by an indiscriminate SaaSpocalypse valuation hit beginning in February and strength in AI-related semiconductor hardware. The manager reduced semiconductor exposure by roughly 10 percent of the portfolio since late 2025 while maintaining significant overweight positions in companies with dominant positions across the supply chain. They view many SaaS businesses as likely AI beneficiaries rather than victims and intend to be patient. The portfolio was broadened to include banking, pharma, and energy for the first time in years, adding Roche, TotalEnergies, Sika, and Unicharm as long-duration growth companies trading at compelling valuations. MercadoLibre exemplifies market short-termism, falling 13 percent despite 46 percent growth and once-in-a-generation opportunity. The manager expects continued volatility driven by AI transformation, higher rates, and geopolitical fragmentation, but believes the widening opportunity set and patient active management position the portfolio to deliver strong long-term returns.
Baillie Gifford's International Growth strategy maintains conviction in a diversified portfolio of high-quality growth companies positioned to benefit from profound structural change, particularly AI transformation, while exploiting market short-termism and volatility to acquire compelling long-duration businesses at attractive valuations.
The manager expects to remain in a period of profound change and volatility driven by AI transformation, higher interest rates, geopolitical fragmentation, and political polarisation. They believe the opportunity set is widening as markets create dislocations between share prices and fundamentals. The portfolio has been broadened to include a wider range of high-quality growth companies and is positioned to deliver good investment returns over the coming years through patient, selective, long-term active management.
As of Jul 29, 2026
Lead Portfolio Manager & CIO
Moderate Conviction Bullish
Market Conviction
The letter demonstrates moderate-high conviction through specific named positions with clear thesis articulation (MercadoLibre, ASML, SK Hynix, Roche, TotalEnergies, Sika, Unicharm) and explicit sizing language (10 percent reduction in semiconductors, significant overweight maintained). The manager provides falsifiable catalysts with structural reasoning (AI-driven supply constraints, Long-Term Agreements, co-funded capex) and shows willingness to hold through volatility (patient on SaaS despite SaaSpocalypse). However, the portfolio is diversified across multiple sectors and geographies rather than concentrated, with hedged language like 'intend to be flexible' and 'we don't rule out changes.' The conviction is expressed through selective position-building and clear thesis defense rather than extreme concentration, placing it in the moderate-high range.
Growth Outlook
Market outlook remains above average conviction: The fund experienced short-term underperformance in Q4 due to temporary pullbacks in high-performing growth stocks, but capitalizes on AI growth by initiating a major position in H...
Risk Appetite
Risk appetite posture is above average conviction: The fund experienced short-term underperformance in Q4 due to temporary pullbacks in high-performing growth stocks, but capitalizes on AI growth by initiating a major position in H...
Capital Deployment
The manager describes active portfolio rotation rather than net deployment or de-risking. They reduced semiconductor exposure by roughly 10 percent of the portfolio since late 2025 while adding new positions in banking, pharma (Roche), energy (TotalEnergies), and industrials (Sika, Unicharm). This represents capital rotation—selling one area to fund others—rather than net cash deployment or raising cash. No specific cash level changes are mentioned. The activity is selective repositioning within a fully invested portfolio, which scores near neutral with a slight positive bias for the new position additions, but the rotation rule caps this at 0.15 since proceeds from semiconductor sales funded the new purchases.
Forward Guidance
Forward guidance signal: The fund experienced short-term underperformance in Q4 due to temporary pullbacks in high-performing growth stocks, but capitalizes on AI growth by initiating a major position in H...
Language Signal
The letter balances opportunity language with risk acknowledgment. Bullish terms include 'opportunities,' 'compelling valuations,' 'strong revenue and earnings growth,' 'widening opportunity set,' 'attractive valuations,' 'well placed to deliver good investment returns,' and 'future opportunity.' Bearish or cautious language includes 'disappointing outcome,' 'painful,' 'overdone,' 'deeply uncomfortable,' 'profoundly unhelpful,' 'challenges,' and 'uncertainty.' The manager frames volatility and market dislocations as creating opportunities rather than expressing concern, but acknowledges recent underperformance and difficult conditions. The net balance leans mildly positive with opportunity-focused framing dominating the conclusion.
Perceived Risk
Perceived risk level is evaluated as moderate conviction. The fund experienced short-term underperformance in Q4 due to temporary pullbacks in high-performing growth stocks, but capitalizes on AI growth by initiating a major position in H...
Opportunity Density
The manager explicitly states the opportunity set is widening and describes finding compelling valuations across multiple areas: SaaS businesses trading at overdone discounts, semiconductor equipment companies with structural improvements, long-duration growth companies like Sika (down 50 percent), Unicharm, and Roche being ignored due to near-term challenges, and new opportunities in banking, pharma, and energy. The language 'widening opportunity set,' 'compelling valuations,' and 'more individual companies trading at compelling valuations despite continued strong revenue and earnings growth' indicates a rich environment for selective stock-picking. This is not characterized as abundant across all sectors but as offering multiple good ideas in defined areas, placing it in the selective-to-good range.
Time Horizon
The manager emphasizes multi-year structural themes (AI transformation over many years, decades-long investment cycles for pharma and energy, long-duration growth companies) and explicitly states patience as a core principle. They describe holding through short-term volatility (SaaSpocalypse, MercadoLibre's 13 percent drop) and focus on long-term fundamentals diverging from share prices. The letter references 'coming years' for return delivery and discusses structural trends playing out over extended periods. However, some catalyst dependency exists (AI-driven demand, supply constraints, quarterly results monitoring for MercadoLibre). The emphasis on patient capital, long-duration businesses, and willingness to hold through near-term challenges places this in the multi-year thesis range with no urgency, though not at the permanent capital extreme.
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